The Slow Demise of Recent Collection Letter Overshadowing Claims

Agencies that collect debts in New York and New Jersey are likely no strangers to the law firm Barshay Sanders PLLC and their recent frequently-filed claim that the format of a collection letter—font size, location of the notice of validation rights, the use or lack of transitional language—overshadows the consumer's validation rights under the Fair Debt Collection Practices Act (FDCPA). The courts have been ruling on these claims over recent months, and there seems to be a consensus: the claim fails. 

Statistics of the Letter Format/Overshadowing Claim

According to the iA Case Law Tracker, New York courts have ruled 15 times on this claim filed on behalf of the consumer by Barshay Sanders. In all but one decision, the debt collector succeeded on either a motion to dismiss or a motion on the merits. Of these 15 decisions:

• 14 were in New York, 1 was in New Jersey;
• 12 were decided on a motion to dismiss;
• 1 was decided on a motion for judgment on the pleadings; and 
• 2 were decided on motions for summary judgment.

The sole case where the debt collector's motion to dismiss was denied occurred in New Jersey. In that case, while the first paragraph on the first page of the collection letter contained the validation notice under a large, bold heading ("DEBT VALIDATION NOTICE"), the bottom of the letter pointed to more rights on the back of the page that had second "DEBT VALIDATION NOTICE" heading with nothing underneath. Judge Vasquez found that this could confuse the least sophisticated consumer about whether validation notice on the front of the letter included all of his rights.  

These Claims Routinely Fails in New York

Notably, New York judges have routinely rejected these overshadowing claims every single time when they have come up for a decision. Typically, the claim asserts that the letter's format—such as the font size, location of the notice of validation rights, the use or lack of transitional language, and so forth—cause the consumer's validation rights to be overshadowed by the remainder of the letter. The courts have routinely found that the least sophisticated consumer would not be confused about their rights in what is likely a typical letter sent by collection agencies. Usually, the validation rights are in a stand-alone paragraph and in the same font size as the rest of the letter.

The most recent example of this claim failing is from yesterday's decision in Schik v. Miramed Revenue Grp. In this case, the plaintiff alleged that the letter contains bolded boxes that bring a consumer's attention to the amount due, request for payment, and where to mail payments. This could, allegedly, cause the least sophisticated consumer to not notice the paragraph containing his validation rights. The letter in question can be found here.

The court was not convinced:

Looking at the Collection Notice in its entirety, the Court strongly disagrees with Plaintiff. Plaintiff argues her rights are difficult to read. However, while the rights are in a smaller typeface than other language in the Collection Notice, they are easy to read. Further, they are the same size as, and located between, other language instructing Plaintiff how to pay, set up a payment plan, or pursue a settlement, casting doubt on Plaintiff's assertion that they appear boilerplate, like "fine print," or unimportant. Plaintiff's assertion that the rights may be overlooked is similarly without merit. They are written in the middle of the page. Other courts have held rights can even be placed on the back of the letter, so long as they are not overshadowed or contradicted by other material. 

(Internal citations omitted.) The court granted the motion to dismiss.

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insideARM Perspective

This type of analysis is crucial when considering litigation defense strategies for FDCPA claims. The iA Case Law Tracker (CLT) makes the task of doing this type of research ridiculously easy—it took me all of about 5 minutes to run a search for these specific claims and read through the decision summaries in the CLT. (This same task would have taken hours using traditional legal research methods.) In addition, the weekly trends and analysis report—available to CLT subscribers only—gives you the first notice when patterns in court decisions like this become apparent. It is an indispensable tool for in-house legal departments and outside counsel defense firms. You can subscribe here.